It is 1999 and Sierra Leone is ravaged by major political unrest. Rebel factions such as the Revolutionary United Front frequently terrorize the countryside, intimidating Mende locals and enslaving many to harvest diamonds, which fund their increasingly successful war effort. One such unfortunate local is fisherman Solomon Vandy (Djimon Hounsou) from Shenge, who is separated from his family and assigned to a workforce overseen by Captain Poison (David Harewood), a ruthless warlord.
One morning, Vandy discovers an enormous pink diamond in the river. Captain Poison tries to take the stone, but the area is suddenly raided by government troops. Vandy buries the stone before being captured. Both Vandy and Poison are incarcerated in Freetown, along with Danny Archer (Leonardo DiCaprio), a white Rhodesian gunrunner, whose family was killed in the Rhodesian Bush War. Archer, also a veteran of the 32 Battalion fighting in the South African Border War, was jailed while trying to smuggle diamonds into Liberia. They were intended for Rudolph van de Kaap (Marius Weyers), a corrupt South African mining executive.
Hearing of the pink diamond in prison, Archer arranges for himself and Vandy to be freed from detention. He travels to Cape Town to meet his employer: Colonel Coetzee (Arnold Vosloo), an Afrikaner formerly with the apartheid-era South African Defence Force, who now commands a private military company. Archer wants the diamond so he can sell it and leave the continent forever, but Coetzee wants it as compensation for Archer’s botched smuggling mission. Archer returns to Sierra Leone, locates Vandy, and offers to help him find his family if he will help recover the diamond.
Meanwhile, RUF insurgents escalate hostilities; Freetown falls to their advance while Vandy’s son Dia is among those rounded up to serve as a child soldier under a liberated Captain Poison. Archer and Vandy narrowly escape to Lungi, where they plan to reach Kono with an American journalist, Maddy Bowen (Jennifer Connelly); in exchange, Archer will provide her evidence of the illicit diamond trade. The trio arrive in Kono after a harrowing journey, where Coetzee and his private army—contracted by the Sierra Leone government—prepare to repulse the rebel offensive.
While Maddy gets out with her story, the two men set out for Captain Poison’s encampment. Dia, stationed with the RUF garrison there, is confronted by Vandy, but having been brainwashed he refuses to acknowledge his father. Archer radios the site’s coordinates to Coetzee, who directs a combined air and ground assault on the camp; Vandy finds Captain Poison and beats him to death with a shovel as the mercenaries overwhelm the RUF defenders. Coetzee then forces Vandy to produce the diamond, but is killed by Archer, who realizes Coetzee would eventually kill them both. Dia holds the pair briefly at gunpoint, but Solomon confronts him again and unbrainwashes him by revealing who he really was, resparking Dia’s memory. Pursued by vengeful mercenaries, Archer discloses he has been mortally wounded and entrusts the stone to Vandy, telling him to take it for his family. Vandy and his son rendezvous with Archer’s pilot, who flies them to safety while Archer makes a final phone call to Maddy; they share final farewells as he asks her to assist Vandy, and gives her permission to finish her article. Archer finally takes in the beautiful African landscape before dying.
Vandy arrives in London and meets with a van de Kaap representative; he exchanges the pink diamond for a large sum of money and being reunited with his entire family. Maddy takes photographs of the deal to publish in her article on the diamond trade, exposing van de Kaap’s criminal actions. Vandy appears as a guest speaker at a conference on “blood diamonds” in Kimberley, and is met with a standing ovation.
As many as 40 countries signed this agreement to handle the sale of illegal diamonds. However, it is up to the buyer to buy diamonds that are completely free from conflict.